Abstract
Proponents of JIT techniques often argue that Japanese manufacturing techniques are among the best in the world. On the other hand, critiques have called the JIT manufacturing techniques “management by stress” and that they are often associated with high work intensity, stress, and fatigue. Prompted by some recent findings, organizational theorists began to question whether these new work practices will have a sustaining effect on performance. Consistent with the social technical systems theory, this study suggests that unless complimentary changes also occur in other related systems within an organization, the perceived productivity gain of a new work system may not be realized. Findings provide some support for the hypotheses tested. For example, results show by itself JIT does not lead to performance gains. Similarly, findings show that incentive pay or extrinsic motivation per se is not associated with better manufacturing performance. Instead, results show JIT interacts with performance goals to produce lower manufacturing costs only when incentive pay is used. For plants using fixed pay, however, manufacturing costs are a decreasing function of performance goals but a marginal increasing function of JIT.
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